Investigation of the Influence of Capital Market on Economic Growth of Islamic Countries that are Members in Organization of Islamic Conference (OIC) over 1990-2009

In the present paper, the impact of capital market on economic growth of 14 countries which were members of Islamic Conference in 1990-2009 periods was investigated. Considering the importance of capital market in economic development, development of this market can result in economic growth. Panel data estimator was used to estimate capital market influences on economic growth. In this study, independent variables include a set of conditional standard variables and stock market variables and development of banking. GDP growth was dependent variable. Results showed that development of banking and direct foreign investment and volume of transactions have positive and significant impacts on economic growth. Results showed that an increase in the mentioned variables will lead to increasing economic growth while stock market index and public costs and transactions value in stock market and also private sector credits were not able to have significant and strong impacts on economic growth. Consequently, capital market has not been able to be effective on development and economic growth of Islamic Conference member countries.